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Mechanics' liens on a public work require strict compliance with statutory notice provisions to bind Crown agencies.
The appellant, Ken Gordon Excavating Limited, and other lien claimants sought to enforce mechanics' liens against a housing project undertaken by Edstan Construction Limited on land purchased from the Ontario Housing Corporation (OHC) and financed by the Ontario Mortgage Corporation (OMC).
The Supreme Court of Canada held that OHC was an 'owner' and the project was a 'public work' under the Mechanics' Lien Act.
The Court found that the ten lien claimants who failed to give written notice to OHC as required for public works had invalid claims against OHC's interest, but the two who did give notice had valid claims for the full amount owed, not limited to the statutory holdback.
Furthermore, the Court characterized payments made by OMC to OHC as 'advances' under the mortgage, meaning the registered liens of the ten claimants had priority over those advances and could be satisfied from the mortgage sale proceeds.
